Turnbull lays out alternative architecture

Australia’s opposition communications spokesperson Malcolm Turnbull has outlined further details of his proposed model for the Australian broadband market.

In a speech to the National Press Club on Wednesday, Turnbull proposed a model which would leave high-density, economically-viable locations served by market competition, unsupported by government; while providing a mix of capital subsidies, co-investment, and in the most remote areas, both capital and recurring subsidies.

Turnbull acknowledged the value of separating Telstra’s wholesale, retail and networks businesses, proposing to go further than the current government. Rather than regulating the relationship between these divisions, Turnbull said he believes full structural separation, with the businesses split into separate companies, would be more valuable to shareholders in the long term.

He says a spun-off Telstra network operation would have exchanges, the copper access network and existing Telstra HFC cable as its assets, and would be tasked with getting a minimum 12 Mbps to as many Australians as possible, “ideally within twelve months”.

This would be followed by a rapid upgrade to 24 Mbps “within forty-eight months”. The most remote locations, Turnbull said, would be served by wireless and satellite services.

Turnbull says it would be open to any carrier to bid for network builds, but in exchange for receiving the government subsidy, the networks would have to be open to all.

He confirmed that locations already connected to the National Broadband Network (NBN) would be retained. While not discussing the cost of likely compensation to NBN Co or Telstra, Turnbull acknowledged that both parties would need to be accommodated under his proposed model.

Partly, any costing depends on how far the NBN build proceeds before the next election (presuming there is a change of government). NBN Co this week announced nine new locations in which network construction will commence during 2011.

Coffs Harbour has been added to NSW towns Kiama and Armidale (where construction has already commenced), and the network will come to the ‘burbs when work starts in Riverstone in western Sydney in November; Toowoomba joins Townsville on Queensland’s build list, as well as Springfield Lakes / Goodna and Aspley; Gungahlin in the ACT rounds out the current targets. ®